Focus on Federal Grants for College
Federal student aid comes in a variety of forms, including student loans, need-based grants, and work-study programs. Federal grants are unique among federal student aid options because this is a sum of money that you won’t have to repay. Federal grants are designed to provide additional support to students and families with demonstrated financial need. Read on to learn more about the difference between student loans and college grants; how you can determine your eligibility for a need-based grant; and the types of federal grants available.
Federal financial aid is designed to improve access and ease costs for prospective college students. Federal grants offer the highest level of support to college students with financial need. Contrary to student loans, students do not have to repay federal need-based grants after graduation.
If you’re looking for free money to help pay for your college education, start your search by looking into your federal financial aid eligibility. Need-based grants, also sometimes called gift aid, are given to students who can demonstrate financial need according to the terms set out by the U.S. Department of Education.
What’s the difference between a federal grant and a federal student loan?
Simply stated, a loan is an amount you’ll have to repay with interest, whereas a grant is free money that you’ll never be asked to repay. With student loans, you will begin accruing interest on your principal amount immediately, and you will be required to repay your principal amount plus interest after graduating.
Different student loans offer different repayment terms — including differences in principal sum, interest rate, and repayment schedule. To learn more about these different student loan types, return to our Guide to Financial Aid for College. By contrast to loans, grants provided through the federal student aid program do not accrue interest and do not need to be repaid upon graduation.
What’s the difference between a federal grant and a scholarship?
Federal grants are given to college students on the basis of financial need, whereas scholarships are typically given on the basis of merit. Some merit scholarships may be specifically geared toward students with demonstrated financial need. By contrast, the most commonplace federal grants — the Pell and FSEOG grants — are not given on the basis of merit. These grants are given to students who are eligible strictly on the basis of financial need. There are, it bears noting, some federal grants that are awarded based on financial need but which carry basic academic performance thresholds as well — such as the ACG and SMART grants — which require financially eligible applicants to also carry at least a 3.0 GPA.
To learn more about scholarships both for merit and financial need, check out our Guide to Scholarships for College.
How do I get federal grants for college?
The first step toward receiving a federal grant for college is filling out your FAFSA (Free Application for Federal Student Aid). Every college or graduate student attending an accredited college, university, or professional school in the U.S. should fill out a FAFSA for every intended year of school. This form is what allows the federal government to determine your eligibility for student loans or need-based grants, and to calculate the loan or grant sum to which you are entitled.
Fill out your FAFSA! This is the only way to get access to federal need-based grants.
Who is eligible for federal grants for college?
Before completing your FAFSA, make sure you meet the basic terms of eligibility. These Basic Eligibility Requirements apply to both student loans and need-based grants:
- Demonstrated financial need
- U.S. citizenship (with the exception of certain eligible non-citizens)
- Valid Social Security #
- Registration with Selective Service (for male applicants)
- Enrollment or acceptance as a regular student in eligible degree or certificate program
- Satisfactory academic progress in college or career school
- Certified statement denoting the student is not in default on a federal student loan, and that the pending loan will be used for the purposes of education only
- Evidence of high-school diploma or General Educational Development (GED) certificate
*Additional requirements may apply to non-U.S citizens, students with criminal convictions, and students with intellectual disabilities.
Beyond these initial criteria for basic federal aid eligibility, your eligibility for need-based grants will be based on your demonstrated financial need. This is determined using your family’s Expected Family Contribution (EFC).
What is the Expected Family Contribution (EFC) and how is it calculated?
The Expected Family Contribution is a figure which is derived from the sum of a percentage of your family’s net income and a percentage of your family’s net assets.
Within three weeks of submitting your FAFSA, you should receive what is called a Student Aid Report (SAR). The SAR is a summary of the data you’ve submitted on your FAFSA, as well as an indication of your EFC and, consequently, your eligibility for need-based grants.
If you have been approved for a need-based grant, you will receive an award letter directly from your school indicating what kind of aid you’re eligible for, and in what amount, once you’ve been accepted. The timing and form of your award letter (electronic or mailed) will vary depending upon the school to which you’ve applied and the timing of your application.
What kind of federal college grants are there?
There are several different types of federal college grants. Read on to see if you might be eligible for any of the following:
Federal Pell Grants
Federal Pell Grants are awarded to low-income students based on need. Unlike loans, Pell Grants do not need to be repaid. Eligibility for Pell Grants is determined based on expected family contribution (EFC), and is available to undergraduate students in the amount of $6,345 during the 2020-2021 school year, though the amount may vary depending on financial need, the cost of the school, and full- or part-time student status. Some graduate students may also qualify for the Pell Grant in specialized circumstances.
Federal Supplemental Educational Opportunity Grants (FSEOG)
The Federal Supplemental Education Opportunity Grant is also provided to students based on demonstrated financial need and does not require repayment. This grant is available to undergraduate students who have already qualified for a Federal Pell Grant but who both require, and are eligible for, further financial support. Students may be given an amount between $1000 and $4000 each year on top of the sum provided through the Pell Grant program. The annual FSEOG grant amount will vary based on the extent of each student’s financial needs. Students must have completed a FAFSA, must claim full-time status, and must have qualified for a Pell Grant, in order to qualify for the FSEOG program.
Academic Competitiveness Grant (ACG)
Academic Competitiveness Grants (ACG) are awarded to first- and second-year students who have previously completed a rigorous high school curriculum (as identified by the Department of Education). According to the Department of Education, “to receive an ACG, a first-year student must have completed secondary school after Jan. 1, 2006; and not have been enrolled in an ACG-eligible program while at or below the age of compulsory school attendance (unless the ACG-eligible classes were also part of his or her high school program). A second-year student must have completed secondary school after Jan. 1, 2005.” Also in order to be eligible, a student must have already demonstrated eligibility for the need-based Pell Grant, must be enrolled in college at least half-time, and must have a program GPA of at least 3.0.
National Science and Mathematics Access to Retain Talent (SMART) Grants are awarded to third-, fourth-, and fifth-year undergraduates in technical fields, critical foreign languages, or certain qualifying liberal arts programs. Also in order to be eligible, a student must have already demonstrated eligibility for the need-based Pell Grant, must be enrolled in college at least half-time, and must have a program GPA of at least 3.0.
Are there additional federal grants that aren’t need-based?
There are a few grants available through the federal student aid program that are based on conditions other than financial need:
Iraq and Afghanistan Service Grants
Iraq and Afghanistan Service Grants are awarded to college applicants who lost a parent or guardian who served as a member of the armed forces and gave their life in Iraq or Afghanistan following the events of September 11th. Eligible applicants must have been under 24 years of age, or already enrolled at least part-time in college at the time of the parent or guardian’s death. Additionally, eligibility is reserved only for those who qualify for all conditions of a Federal Pell Grant but the expected family contribution (EFC) condition. The sum for the Service Grant will typically match the amount awarded for Federal Pell Grants in a given year. For the 2020-2021 school year, that sum is capped at $6,345. As with other federal grants, recipients do not need to repay the awarded sum.
Teacher Education Assistance for College and Higher Education (TEACH) Grants
The TEACH grant is distinct from other federal grants in that students must take certain courses, and commit to certain post-graduate jobs in order to be eligible. Failure to meet these conditions can result in the grant becoming a loan which must be repaid. To earn a TEACH grant, an applicant must complete a FAFSA, qualify for federal student aid, enroll in a TEACH-participating undergraduate or graduate school, enroll in a TEACH-Grant-eligible program, meet basic academic performance thresholds (which may vary per school and should be discussed with your school’s financial aid office), receive TEACH Grant counseling, and sign a TEACH Grant Agreement to serve.
This agreement commits the applicant, upon program completion, to serve in a high-need field, usually in a school or service agency serving low-income families, and for at least four complete academic years within eight years of graduation. TEACH Grant recipients will generally be awarded up to $4,000 per year, which does not need to be repaid if the conditions outlined above are all met.
Are there other need-based grants if you’re not eligible for federal grants?
There are a number of conditions which may impact your eligibility for need-based federal grants. For instance, international students or undocumented students are not eligible for federal student aid. This means that students who fall into these demographics won’t qualify for loans or grants through the U.S. Department of Education.
The same may be true for students who have previously been convicted of a crime, or for students who have practical financial needs but who may not quite qualify for federal need-based grants based on the equation used to derive the Expected Family Contribution (EFC) figure.
In these cases, there may be additional options through either a state of residence or through your college’s Financial Aid Office. If you do not qualify for federal student aid, or if you fall short of economic requirements for federal grant programs, reach out to your college financial aid office to find out about additional programs.
You can also visit the National Association of Student Financial Aid Administrators to find your state’s financial aid department.
For other funding options that do not require repayment, visit our Guide to Scholarships for College.
For more on filling out your FAFSA, important information on student loans, key deadlines, and more, check out our Guide to Financial Aid for College.